Correlation Between Thai Beverage and Capital Counties
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Capital Counties at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Thai Beverage and Capital Counties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Beverage Public and Capital Counties Properties, you can compare the effects of market volatilities on Thai Beverage and Capital Counties and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Thai Beverage with a short position of Capital Counties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Capital Counties.
Diversification Opportunities for Thai Beverage and Capital Counties
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thai and Capital is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Capital Counties Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Counties Pro and Thai Beverage is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Thai Beverage Public are associated (or correlated) with Capital Counties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Counties Pro has no effect on the direction of Thai Beverage i.e., Thai Beverage and Capital Counties go up and down completely randomly.
Pair Corralation between Thai Beverage and Capital Counties
Assuming the 90 days horizon Thai Beverage Public is expected to generate 1.51 times more return on investment than Capital Counties. However, Thai Beverage is 1.51 times more volatile than Capital Counties Properties. It trades about 0.1 of its potential returns per unit of risk. Capital Counties Properties is currently generating about -0.09 per unit of risk. If you would invest 36.00 in Thai Beverage Public on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Thai Beverage Public or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Thai Beverage Public vs. Capital Counties Properties
Performance |
| Timeline |
| Thai Beverage Public |
| Capital Counties Pro |
Thai Beverage and Capital Counties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Capital Counties
The main advantage of trading using opposite Thai Beverage and Capital Counties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Capital Counties can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Capital Counties will offset losses from the drop in Capital Counties' long position.The idea behind Thai Beverage Public and Capital Counties Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Capital Counties vs. MOLSON RS BEVERAGE | Capital Counties vs. Caltagirone SpA | Capital Counties vs. BLUESCOPE STEEL | Capital Counties vs. Thai Beverage Public |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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